|
|
||
|
|
||
                              
|
6331 Code and Regulations | |
|
Internal
Revenue Code §6631 - LEVY
6331(a) AUTHORITY OF SECRETARY. --If any person liable to pay any tax neglects or
refuses to pay the same within 10 days after notice and demand, it
shall be lawful for the Secretary to collect such tax (and such
further sum as shall be sufficient to cover the expenses of the
levy) by levy upon all property and rights to property (except
such property as is exempt under section 6334) belonging to such
person or on which there is a lien provided in this chapter for
the payment of such tax. Levy may be made upon the accrued salary
or wages of any officer, employee, or elected official, of the
United States, the District of Columbia, or any agency or
instrumentality of the United States or the District of Columbia,
by serving a notice of levy on the employer (as defined in section
3401(d)) of such officer, employee, or elected official. If the
Secretary makes a finding that the collection of such tax is in
jeopardy, notice and demand for immediate payment of such tax may
be made by the Secretary and, upon failure or refusal to pay such
tax, collection thereof by levy shall be lawful without regard to
the 10-day period provided in this section. 6331(b) SEIZURE 6331(c) SUCCESSIVE SEIZURES. --Whenever any property or right to property upon which levy
has been made by virtue of subsection (a) is not sufficient to
satisfy the claim of the United States for which levy is made, the
Secretary may, thereafter, and as often as may be necessary,
proceed to levy in like manner upon any other property liable to
levy of the person against whom such claim exists, until the
amount due from him, together with all expenses, is fully paid. 6331(d) REQUIREMENT OF NOTICE BEFORE LEVY. -- 6331(d)(1) IN GENERAL. --Levy may be made under subsection (a) upon the salary or
wages or other property of any person with respect to any unpaid
tax only after the Secretary has notified such person in writing
of his intention to make such levy. 6331(d)(2) 30- 6331(d)(2)(A)
given
in person, 6331(d)(2)(B)
left
at the dwelling or usual place of business of such person, or 6331(d)(2)(C)
sent
by certified or registered mail to such person's last known
address, no less than 30 days before the day of the levy. 6331(d)(3) JEOPARDY. --Paragraph (1) shall not apply to a levy if the Secretary has
made a finding under the last sentence of subsection (a) that the
collection of tax is in jeopardy. 6331(d)(4) INFORMATION INCLUDED WITH NOTICE. --The
notice required under paragraph (1) shall include a brief
statement which sets forth in simple and nontechnical terms -- 6331(d)(4)(A)
the
provisions of this title relating to levy and sale of property, 6331(d)(4)(B)
the
procedures applicable to the levy and sale of property under this
title, 6331(d)(4)(C)
the
administrative appeals available to the taxpayer with respect to
such levy and sale and the procedures relating to such appeals, 6331(d)(4)(D)
the
alternatives available to taxpayers which could prevent levy on
the property (including installment agreements under section
6159), 6331(d)(4)(E)
the
provisions of this title relating to redemption of property and
release of liens on property, and 6331(d)(4)(F)
the
procedures applicable to the redemption of property and the
release of a lien on property under this title. 6331(e) CONTINUING LEVY ON SALARY 6331(f) UNECONOMICAL LEVY. --No levy may be made on any property if the amount of the
expenses which the Secretary estimates (at the time of levy) would
be incurred by the Secretary with respect to the levy and sale of
such property exceeds the fair market value of such property at
the time of levy. 6331(g) LEVY ON APPEARANCE DATE OF SUMMONS. -- 6331(g)(1) IN GENERAL. --No levy may be made on the property of any person on any day
on which such person (or officer or employee of such person) is
required to appear in response to a summons issued by the
Secretary for the purpose of collecting any underpayment of tax. 6331(g)(2) NO APPLICATION IN CASE OF JEOPARDY. --This
subsection shall not apply if the Secretary finds that the
collection of tax is in jeopardy. 6331(h) CONTINUING LEVY ON CERTAIN PAYMENTS. -- 6331(h)(1) IN GENERAL. --If the Secretary approves a levy under this subsection, the
effect of such levy on specified payments to or received by a
taxpayer shall be continuous from the date such levy is first made
until such levy is released. Notwithstanding section 6334, such
continuous levy shall attach to up to 15 percent of any specified
payment due to the taxpayer. 6331(h)(2) SPECIFIED PAYMENT. --For the purposes of paragraph (1), the term "specified
payment" means -- 6331(h)(2)(A)
any
Federal payment other than a payment for which eligibility is
based on the income or assets (or both) of a payee, 6331(h)(2)(B)
any
payment described in paragraph (4), (7), (9), or (11) of section
6334(a), and 6331(h)(2)(C)
any
annuity or pension payment under the Railroad Retirement Act or
benefit under the Railroad Unemployment Insurance Act. 6331(h)(3) INCREASE IN LEVY FOR CERTAIN PAYMENTS. --Paragraph
(1) shall be applied by substituting "100 percent" for
"15 percent" in the case of any specified payment due to
a vendor of goods or services sold or leased to the Federal
Government. 6331(i) NO LEVY DURING PENDENCY OF PROCEEDINGS FOR REFUND OF DIVISIBLE
TAX. -- 6331(i)(1) IN GENERAL. --No levy may be made under subsection (a) on the property or
rights to property of any person with respect to any unpaid
divisible tax during the pendency of any proceeding brought by
such person in a proper Federal trial court for the recovery of
any portion of such divisible tax which was paid by such person if
-- 6331(i)(1)(A)
the
decision in such proceeding would be res judicata with respect to
such unpaid tax; or 6331(i)(1)(B)
such
person would be collaterally estopped from contesting such unpaid
tax by reason of such proceeding. 6331(i)(2) DIVISIBLE TAX. --For purposes of paragraph (1), the term "divisible
tax" means -- 6331(i)(2)(A)
any
tax imposed by subtitle C; and 6331(i)(2)(B)
the
penalty imposed by section 6672 with respect to any such tax. 6331(i)(3) EXCEPTIONS. -- 6331(i)(3)(A)
CERTAIN UNPAID TAXES. --This subsection shall not apply with respect to any unpaid tax if -- 6331(i)(3)(A)(i) the taxpayer files a written notice with the Secretary which waives the
restriction imposed by this subsection on levy with respect to
such tax; or 6331(i)(3)(A)(ii) the Secretary finds that the collection of such tax is in jeopardy. 6331(i)(3)(B)
CERTAIN LEVIES. --This
subsection shall not apply to -- 6331(i)(3)(B)(i) any levy to carry out an offset under section 6402; and 6331(i)(3)(B)(ii) any levy which was first made before the date that the applicable
proceeding under this subsection commenced. 6331(i)(4) LIMITATION ON COLLECTION ACTIVITY; AUTHORITY TO ENJOIN
COLLECTION. -- 6331(i)(4)(A)
LIMITATION ON COLLECTION. --No proceeding in court for the collection of any unpaid tax
to which paragraph (1) applies shall be begun by the Secretary
during the pendency of a proceeding under such paragraph. This
subparagraph shall not apply to -- 6331(i)(4)(A)(i) any counterclaim in a proceeding under such paragraph; or 6331(i)(4)(A)(ii) any proceeding relating to a proceeding under such paragraph. 6331(i)(4)(B)
AUTHORITY TO ENJOIN. --Notwithstanding section 7421(a), a levy or collection proceeding
prohibited by this subsection may be enjoined (during the period
such prohibition is in force) by the court in which the proceeding
under paragraph (1) is brought. 6331(i)(5) SUSPENSION OF STATUTE OF LIMITATIONS ON COLLECTION. --The
period of limitations under section 6502 shall be suspended for
the period during which the Secretary is prohibited under this
subsection from making a levy. 6331(i)(6) PENDENCY OF PROCEEDING. --For purposes of this subsection, a proceeding is
pending beginning on the date such proceeding commences and ending
on the date that a final order or judgment from which an appeal
may be taken is entered in such proceeding. 6331(j) NO LEVY BEFORE INVESTIGATION OF STATUS OF PROPERTY. -- 6331(j)(1) IN GENERAL. --For purposes of applying the provisions of this subchapter,
no levy may be made on any property or right to property which is
to be sold under section 6335 until a thorough investigation of
the status of such property has been completed. 6331(j)(2) ELEMENTS IN INVESTIGATION. --For
purposes of paragraph (1), an investigation of the status of any
property shall include -- 6331(j)(2)(A)
a
verification of the taxpayer's liability; 6331(j)(2)(B)
the
completion of an analysis under subsection (f); 6331(j)(2)(C)
the
determination that the equity in such property is sufficient to
yield net proceeds from the sale of such property to apply to such
liability; and 6331(j)(2)(D)
a
thorough consideration of alternative collection methods. 6331(k) NO LEVY WHILE CERTAIN OFFERS PENDING OR INSTALLMENT AGREEMENT
PENDING OR IN EFFECT. -- 6331(k)(1) OFFER-IN-COMPROMISE PENDING. --No
levy may be made under subsection (a) on the property or rights to
property of any person with respect to any unpaid tax -- 6331(k)(1)(A)
during
the period that an offer-in-compromise by such person under
section 7122 of such unpaid tax is pending with the Secretary; and 6331(k)(1)(B)
if
such offer is rejected by the Secretary, during the 30 days
thereafter (and, if an appeal of such rejection is filed within
such 30 days, during the period that such appeal is pending). For
purposes of subparagraph (A), an offer is pending beginning on the
date the Secretary accepts such offer for processing. 6331(k)(2) INSTALLMENT AGREEMENTS. --No levy may be made under subsection (a) on the
property or rights to property of any person with respect to any
unpaid tax -- 6331(k)(2)(A)
during
the period that an offer by such person for an installment
agreement under section 6159 for payment of such unpaid tax is
pending with the Secretary; 6331(k)(2)(B)
if
such offer is rejected by the Secretary, during the 30 days
thereafter (and, if an appeal of such rejection is filed within
such 30 days, during the period that such appeal is pending); 6331(k)(2)(C)
during
the period that such an installment agreement for payment of such
unpaid tax is in effect; and 6331(k)(2)(D)
if
such agreement is terminated by the Secretary, during the 30 days
thereafter (and, if an appeal of such termination is filed within
such 30 days, during the period that such appeal is pending). 6331(k)(3) CERTAIN RULES TO APPLY. --Rules similar to the rules of -- 6331(k)(3)(A)
paragraphs
(3) and (4) of subsection (i), and 6331(k)(3)(B)
except
in the case of paragraph (2)(C), paragraph (5) of subsection (i), shall
apply for purposes of this subsection. 6331(l) CROSS REFERENCES. -- 6331(l)(1) For
provisions relating to jeopardy, see subchapter A of chapter 70. 6331(l)(2) For
proceedings applicable to sale of seized property, see section
6335. 6331(l)(3) For
release and notice of release of levy, see section 6343.
(a) Authority
to levy (1) In general. --If any person liable to pay any tax neglects or refuses to
pay the tax within 10 days after notice and demand, the district
director to whom the assessment is charged (or, upon his request,
any other district director) may proceed to collect the tax by
levy. The district director may levy upon any property, or rights
to property, whether real or personal, tangible or intangible,
belonging to the taxpayer. The district director may also levy
upon property with respect to which there is a lien provided by
section 6321 or 6324 for the payment of the tax. For exemption of
certain property from levy, see section 6334 and the regulations
thereunder. As used in section 6331 and this section, the term
"tax" includes any interest, additional amount, addition
to tax, or assessable penalty, together with costs and expenses.
Property subject to a Federal tax lien which has been sold or
otherwise transferred by the taxpayer may be seized while in the
hands of the transferee or any subsequent transferee. However, see
provisions under sections 6323 and 6324(a)(2) and (b) for
protection of certain transferees against a Federal tax lien. Levy
may be made by serving a notice of levy on any person in
possession of, or obligated with respect to, property or rights to
property subject to levy, including receivables, bank accounts,
evidences of debt, securities, and salaries, wages, commissions,
or other compensation. A levy on a bank reaches any interest that
accrues on the taxpayer's balance under the terms of the bank's
agreement with the depositor during the 21-day holding period
provided for in section 6332(c). Except as provided in §301.6331-1(b)(1)
with regard to a levy on salary or wages, a levy extends only to
property possessed and obligations which exist at the time of the
levy. Obligations exist when the liability of the obligor is fixed
and determinable although the right to receive payment thereof may
be deferred until a later date. For example, if on the first day
of the month a delinquent taxpayer sold personal property subject
to an agreement that the buyer remit the purchase price on the
last day of the month, a levy made on the buyer on the 10th day of
the month would reach the amount due on the sale, although the
buyer need not satisfy the levy by paying over the amount to the
district director until the last day of the month. Similarly, a
levy only reaches property in the possession of the person levied
upon at the time the levy is made together with interest that
accrues during the 21-day holding period provided for in section
6332(c). For example, a levy made on a bank with respect to the
account of a delinquent taxpayer is satisfied if the bank
surrenders the amount of the taxpayer's balance at the time the
levy is made. The levy has no effect upon any subsequent deposit
made in the bank by the taxpayer. Subsequent deposits may be
reached only by a subsequent levy on the bank. (2) Jeopardy cases. --If the district director finds that the collection of any tax
is in jeopardy, he or she may make notice and demand for immediate
payment of such tax and, upon failure or refusal to pay such tax,
collection thereof by levy shall be lawful without regard to the
10-day period provided in section 6331(a), the 30-day period
provided in section 6331(d), or the limitation on levy provided in
section 6331(g)(1). (3) Bankruptcy or receivership cases. --During
a bankruptcy proceeding or a receivership proceeding in either a
Federal or a State court, the assets of the taxpayer are in
general under the control of the court in which such proceeding is
pending. Taxes cannot be collected by levy upon assets in the
custody of a court, whether or not such custody is incident to a
bankruptcy or receivership proceeding, except where the proceeding
has progressed to such a point that the levy would not interfere
with the work of the court or where the court grants permission to
levy. Any assets which under applicable provisions of law are not
under the control of the court may be levied upon, for example,
property exempt from court custody under State law or the
bankrupt's earnings and property acquired after the date of
bankruptcy. However, levy upon such property is not mandatory and
the Government may rely upon payment of taxes in the proceeding. (4) Certain types of compensation (i)
Federal employees. --Levy may be made upon the salary or wages of any officer or
employee (including members of the Armed Forces), or elected or
appointed official, of the United States, the District of
Columbia, or any agency or instrumentality of either, by serving a
notice of levy on the employer of the delinquent taxpayer. As used
in this subdivision, the term "employer" means (a)
the officer or employee of the United States, the District of
Columbia, or of the agency or instrumentality of the United States
or the District of Columbia, who has control of the payment of the
wages, or (b) any other officer or employee designated by
the head of the branch, department, agency, or instrumentality of
the United States or of the District of Columbia as the party upon
whom service of the notice of levy may be made. If the head of
such branch, department, agency, or instrumentality designates an
officer or employee other than one who has control of the payment
of the wages, as the party upon whom service of the notice of levy
may be made, such head shall promptly notify the Commissioner of
the name and address of each officer or employee so designated and
the scope or extent of his authority as such designee. (ii)
State and municipal employees. --Salaries, wages, or other compensation of any officer,
employee, or elected or appointed official of a State or
Territory, or of any agency, instrumentality, or political
subdivision thereof, are also subject to levy to enforce
collection of any Federal tax. (iii)
Seamen. --Notwithstanding
the provisions of section 12 of the Seamen's Act of 1915 (38 Stat.
1169; 46 U.S.C. 601), wages of seamen, apprentice seamen, or
fishermen employed on fishing vessels are subject to levy. See
section 6334(c). (5)
Noncompetent Indians. --Solely
for purposes of sections 6321 and 6331, any interest in restricted
land held in trust by the United States for an individual
noncompetent Indian (and not for a tribe) shall not be deemed to
be property, or a right to property, belonging to such Indian. (b) Continuing levies and successive seizures (1) Continuing effect of levy on salary and wages. --A
levy on salary or wages has continuous effect from the time the
levy originally is made until the levy is released pursuant to
section 6343. For this purpose, the term salary or wages
includes compensation for services paid in the form of fees,
commissions, bonuses, and similar items. The levy attaches to both
salary or wages earned but not yet paid at the time of the levy,
advances on salary or wages made subsequent to the date of the
levy, and salary or wages earned and becoming payable subsequent
to the date of the levy, until the levy is released pursuant to
section 6343. In general, salaries or wages that are the subject
of a continuing levy and are not exempt from levy under section
6334(a)(8) or (9), are to be paid to the district director, the
service center director, or the compliance center director
(director) on the same date the payor would otherwise pay over the
money to the taxpayer. For example, if an individual normally is
paid on the Wednesday following the close of each work week, a
levy made upon his or her employer on any Monday would apply to
both wages due for the prior work week and wages for succeeding
work weeks as such wages become payable. In such a case, the levy
would be satisfied if, on the first Wednesday after the levy and
on each Wednesday thereafter until the employer receives a notice
of release from levy described in section 6343, the employer pays
over to the director wages that would otherwise be paid to the
employee on such Wednesday (less any exempt amount pursuant to
section 6334). (2) Successive seizures. --Whenever any property or rights to property upon which
a levy has been made are not sufficient to satisfy the claim of
the United States for which the levy is made, the district
director may thereafter, and as often as may be necessary, proceed
to levy in like manner upon any other property or rights to
property subject to levy of the person against whom such claim
exists or on which there is a lien imposed by section 6321 or 6324
(or the corresponding provision of prior law) for the payment of
such claim until the amount due from such person, together with
all costs and expenses, is fully paid. (c) Service of notice of levy by mail. --A
notice of levy may be served by mailing the notice to the person
upon whom the service of a notice of levy is authorized under
paragraph (a)(1) of this section. In such a case the date and time
the notice is delivered to the person to be served is the date and
time the levy is made. If the notice is sent by certified mail,
return receipt requested, the date of delivery on the receipt is
treated as the date the levy is made. If, after receipt of a
notice of levy, an officer or other person authorized to act on
behalf of the person served signs and notes the date and time of
receipt on the notice of levy, the date and time so noted will be
presumed to be, in the absence of proof to the contrary, the date
and time of delivery. Any person may, upon written notice to the
district director having audit jurisdiction over such person, have
all notices of levy by mail sent to one designated office. After
such a notice is received by the district director, notices of
levy by mail will be sent to the designated office until a written
notice withdrawing the request or a written notice designating a
different office is received by the district director. (d) Effective date. --These
regulations are effective
(a) Authority to levy (1) In general. --If any person liable to pay any tax neglects or refuses to
pay the tax within 10 days after notice and demand, the district
director to whom the assessment is charged (or, upon his request,
any other district director) may proceed to collect the tax by
levy. The district director may levy upon any property, or rights
to property, whether real or personal, tangible or intangible,
belonging to the taxpayer. The district director may also levy
upon property with respect to which there is a lien provided by
section 6321 or 6324 for the payment of the tax. For exemption of
certain property from levy, see section 6334 and the regulations
thereunder. As used in section 6331 and this section, the term
"tax" includes any interest, additional amount, addition
to tax, or assessable penalty, together with costs and expenses.
Property subject to a Federal tax lien which has been sold or
otherwise transferred by the taxpayer may be seized while in the
hands of the transferee or any subsequent transferee. However, see
provisions under sections 6323 and 6324(a)(2) and (b) for
protection of certain transferees against a Federal tax lien. Levy
may be made by serving a notice of levy on any person in
possession of, or obligated with respect to, property or rights to
property subject to levy, including receivables, bank accounts,
evidences of debt, securities, and salaries, wages, commissions,
or other compensation. A levy on a bank reaches any interest that
accrues on the taxpayer's balance under the terms of the bank's
agreement with the depositor during the 21-day holding period
provided for in section 6332(c). Except as provided in §301.6331-1(b)(1)
with regard to a levy on salary or wages, a levy extends only to
property possessed and obligations which exist at the time of the
levy. Obligations exist when the liability of the obligor is fixed
and determinable although the right to receive payment thereof may
be deferred until a later date. For example, if on the first day
of the month a delinquent taxpayer sold personal property subject
to an agreement that the buyer remit the purchase price on the
last day of the month, a levy made on the buyer on the 10th day of
the month would reach the amount due on the sale, although the
buyer need not satisfy the levy by paying over the amount to the
district director until the last day of the month. Similarly, a
levy only reaches property in the possession of the person levied
upon at the time the levy is made together with interest that
accrues during the 21-day holding period provided for in section
6332(c). For example, a levy made on a bank with respect to the
account of a delinquent taxpayer is satisfied if the bank
surrenders the amount of the taxpayer's balance at the time the
levy is made. The levy has no effect upon any subsequent deposit
made in the bank by the taxpayer. Subsequent deposits may be
reached only by a subsequent levy on the bank. (2) Jeopardy cases. --If the district director finds that the collection of any tax
is in jeopardy, he or she may make notice and demand for immediate
payment of such tax and, upon failure or refusal to pay such tax,
collection thereof by levy shall be lawful without regard to the
10-day period provided in section 6331(a), the 30-day period
provided in section 6331(d), or the limitation on levy provided in
section 6331(g)(1). (3) Bankruptcy or receivership cases. --During
a bankruptcy proceeding or a receivership proceeding in either a
Federal or a State court, the assets of the taxpayer are in
general under the control of the court in which such proceeding is
pending. Taxes cannot be collected by levy upon assets in the
custody of a court, whether or not such custody is incident to a
bankruptcy or receivership proceeding, except where the proceeding
has progressed to such a point that the levy would not interfere
with the work of the court or where the court grants permission to
levy. Any assets which under applicable provisions of law are not
under the control of the court may be levied upon, for example,
property exempt from court custody under State law or the
bankrupt's earnings and property acquired after the date of
bankruptcy. However, levy upon such property is not mandatory and
the Government may rely upon payment of taxes in the proceeding. (4) Certain types of compensation (i)
Federal employees. --Levy may be made upon the salary or wages of any officer or
employee (including members of the Armed Forces), or elected or
appointed official, of the United States, the District of
Columbia, or any agency or instrumentality of either, by serving a
notice of levy on the employer of the delinquent taxpayer. As used
in this subdivision, the term "employer" means (a)
the officer or employee of the United States, the District of
Columbia, or of the agency or instrumentality of the United States
or the District of Columbia, who has control of the payment of the
wages, or (b) any other officer or employee designated by
the head of the branch, department, agency, or instrumentality of
the United States or of the District of Columbia as the party upon
whom service of the notice of levy may be made. If the head of
such branch, department, agency, or instrumentality designates an
officer or employee other than one who has control of the payment
of the wages, as the party upon whom service of the notice of levy
may be made, such head shall promptly notify the Commissioner of
the name and address of each officer or employee so designated and
the scope or extent of his authority as such designee. (ii)
State and municipal employees. --Salaries, wages, or other compensation of any officer,
employee, or elected or appointed official of a State or
Territory, or of any agency, instrumentality, or political
subdivision thereof, are also subject to levy to enforce
collection of any Federal tax. (iii)
Seamen. --Notwithstanding
the provisions of section 12 of the Seamen's Act of 1915 (38 Stat.
1169; 46 U.S.C. 601), wages of seamen, apprentice seamen, or
fishermen employed on fishing vessels are subject to levy. See
section 6334(c). |